New York Attorney General Eric Schneiderman is investigatingStandard & Poor's to determine whether it failed to follow itsown methodology in rating commercial-mortgage bonds (CMBS) in orderto win business from banks, according to two people with knowledgeof the matter.
The unit of McGraw Hill Financial Inc. is facing scrutiny on sixsuch deals it graded in 2011, said the people, who asked not to beidentified because the probe hasn't been made public. Ed Sweeney, aspokesman for S&P in New York, declined to comment, as did MattMittenthal, a spokesman for Schneiderman.
The New York Attorney General's office is at least the thirdgovernment agency investigating S&P's business of gradingcommercial mortgage-backed securities, in which banks pool togetherloans on properties such as shopping malls, hotels, and skyscrapersto create securities that are sold to investors.
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